There have been numerous countries in the world that stand to gain a lot provided greater access to cryptocurrencies are ensured. The lack of access to banks has created a troublesome financial situation for many people in different parts of the world.
With $25 billion worth of cryptocurrency sent and $24 billion received over the past year, Latin America is one of the smaller crypto economies by volume transacted, as per data collected by Chainalysis.
Despite being a small crypto economy, Latin America represented between 5% and 9% of all cryptocurrency activity in any given month over the last year. The absence of banking access and the need for remittances have been fueling the use of cryptocurrency in the region. As per the World Bank, remittances made 1.7% of the total GDP in Latin America, with only the Middle East and North Africa [MENA] and sub-Saharan Africa having a larger GDP share made up of transfers from overseas.
Even though the remittances accounted for only 1.7% of the GDP, 90% of a cryptocurrency received by Latin America was coming from outside the region.
Among the regions sending remittances, North-America represented the biggest source of Latin America in fiat currency, as per Chainalysis. The most active remittance corridor has remained between the United States to Mexico. According to Bitso’s Head of Regulator Risk, Patricia Risso Mexico received 11% of the region’s retail payments, behind only Brazil and Venezuela.
Apart from remittances, businesses and individuals both have been facing problems getting a bank account. It noted that:
“Without easy banking access, many young people in Latin America turn to cryptocurrency as a means of storing value. Villanueva also notes the importance of stablecoins like DAI and USDC for Latin Americans looking to lock in their savings”
With currency instability being one of the longest ailing problems in the region, the cryptocurrency adoption has been fueling up. Although slow, the cryptocurrencies have been becoming popular by serving users with what traditional systems lack.